Market hits jackpot on the pokies

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It was a day of two darlings yesterday on the sharemarket, which
itself put in a stellar performance.

Gaming machine manufacturer Aristocrat Leisure started strongly
but was eventually overtaken in the price-leap stakes by energy
company Pacific Hydro, which surged late in the day. Aristocrat,
the best-performing stock on the S&P/ASX 200 Index this year,
revealed at the start of the day that booming sales in Japan had
lifted its profit forecast by 26 per cent.

Its delight, unsurprisingly, spread to investors. "The market
fell in love with Aristocrat from the first bell," said EL & C
Baillieu analyst Richard Morrow.

"This was the company that some people thought was terminal only
12 months ago."

After skyrocketing to $8.87 within minutes of the start of
trade, the shares finished with a gain of 78 ¢ at a closing
high of $8.46.

Renewable energy company Pacific Hydro made its run on news that
it had appointed advisers to handle a possible takeover.

The Melbourne-based company said it had been approached in
recent months by Asian-based companies regarding a takeover, with
Australian Gas Light also thought to be a possible suitor.

In the takeover hysteria, Pacific Hydro's
shares leapt more than 20 per cent to $3.82, up 66 ¢ from
Tuesday's close.

The hangover from ANZ's strong profit announcement on Tuesday
spread the cheer throughout the banking sector.

Commonwealth Bank forged ahead 41 ¢ to
$31.61 but was outperformed by a 76 ¢ rise in
Westpac that took the stock to a close of
$34.95.

National Australia Bank put on 21 ¢ to
$27.85 and ANZ rose by the same margin to finish
at $19.78, while smaller rival St George was also
in positive territory, up 31 ¢ at $22.91.

Most resources stocks were strong, with mining giant BHP
Billiton finishing 18 ¢ to the good at $14.10.

WMC Resources also improved, up 21 ¢ at
$5.13, and Rio Tinto jumped 28 ¢ to a close
of $37.30.

While News Corp can now begin packing up in preparation for
Delaware, investors again showed no desire to turn their back on
the global media company. News Corp ordinary
shares finished at $10.91, a rise of 15 ¢, and the preferred
scrip rose by the same amount to close at $10.69.

The Kerry Packer-led Publishing and Broadcasting
Ltd improved by 7 ¢ to $4.52, while publisher
John Fairfax Holdings, owner of The Age,
reached its highest closing price in more than two years, up 6
¢ to $4.12.

Freeman Fox Securities head of broking Ian Daw said the
S&P/ASX 200 Index's strong performance across all sectors and
the record finish at 3741.2 were due to the "traditional October
pullback drawing to a close".

"The market usually has a bit of a rally and traditionally
rallies into the ex dividends period, which is in November," he
said.

It was also announced yesterday that investment fund Diversified
Utility and Energy Trusts would replace Australian Leisure &
Hospitality Group in the S&P/ASX 200 following the takeover of
ALH.